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Intelligence 36 (2008) 127 – 142

Relevance of education and intelligence at the national level


for the economic welfare of people
Heiner Rindermann ⁎
Institute of Psychology, Otto-von-Guericke-Universitaet Magdeburg, PO Box 4120, D-39016 Magdeburg, Germany
Received 7 March 2006; received in revised form 12 February 2007; accepted 12 February 2007
Available online 27 April 2007

Abstract

Cognitive abilities are important for the economic and non-economic success of individuals and societies. For international
analyses, the collection of IQ-measures from Lynn and Vanhanen was supplemented and meliorated by data from international student
assessment studies (IEA-Reading, TIMSS, PISA, PIRLS). The cognitive level of a nation is highly correlated with its educational
level (r = .78, N = 173). In international comparisons, it also shows a high correlation with gross domestic product (GDP, r = .63,
N = 185). However, in cross-sectional studies, the causal relationship between intelligence and national wealth is difficult to
determine. In longitudinal analyses with various samples of nations, education and cognitive abilities appear to be more important as
developmental factors for GDP than economic freedom. Education and intelligence are also more relevant to economic welfare than
vice versa, but at the national level the influence of economic wealth on cognitive development is still substantial.
© 2007 Elsevier Inc. All rights reserved.

Keywords: Education; Intelligence; Economic growth; International cognitive ability comparisons; Modernity

1. The relevance of cognitive abilities at the 2003; Gottfredson & Deary, 2004; Herrnstein & Murray,
individual and national level 1994; Murray, 1998; Piaget, 1932; Schmidt & Hunter,
1998; Whalley & Deary, 2001). Education shows similar
Thinking ability, knowledge and the intelligent use of positive effects (Barnett, 1998), even lowering the risk of
knowledge are considered to be important determinants HIV infection (Sanderson, 2004; UNESCO, 2004).
of life success. The correlates of intelligence at the in- Throughout the past century education has been
dividual level include aspects of civil life such as viewed as an important determinant of the cultural,
employment status, income, life expectancy, moral political and social success of nations and of cultural and
development, behavior complying with legal standards, religious groups (macro-social level; e.g. Weber, 1988/
married life and beneficial education of children (Armor, 1920). At least since OECD studies about student
cognitive competences like PISA and the international
collection of intelligence test results by Lynn and
⁎ Current address: Karl-Franzens-University Graz, Institute of
Vanhanen (2002, 2006) cognitive abilities are consid-
Psychology, Universitätsplatz 2, A-8010 Graz, Austria.
ered to be positive determinants of national wealth. The
E-mail addresses: heiner.rindermann@gse-w.uni-magdeburg.de, basic assumption of international ability comparisons is
heiner.rindermann@uni-graz.at. that at the macro-social level cognitive abilities are
0160-2896/$ - see front matter © 2007 Elsevier Inc. All rights reserved.
doi:10.1016/j.intell.2007.02.002
128 H. Rindermann / Intelligence 36 (2008) 127–142

important causal factors for economic welfare (mea- different countries; (4) different authors conducted the
sured as gross domestic product, GDP) and perhaps also test surveys; (5) measurements of intelligence stem from
for non-economic welfare (democracy, rule of law, different years (Lynn and Vanhanen corrected this); (6)
human rights, health). missing data were estimated by using unweighted
Cognitive abilities help individuals to succeed in arithmetic means of neighboring countries with similar
school and find better opportunities in jobs and private people. It is therefore not surprising that some researchers
life (door opener function), and they help in everyday are skeptical. Hunt and Sternberg (2006), for example,
life situations, especially when the understanding and criticized the “inadequate estimates of national IQ” (p.
effective use of causal relationships are required 131), and maintained that the “concept of national IQ is
(problem solving function). Cognitive abilities are meaningless without carefully designed probability
especially important in complex occupations with high samples of the population” (p. 133). In response to
demands on learning, novel problem solving and these criticisms, Templer and Arikawa (2006, p. 139)
independent decision-making. However, the causal admit problems but refer to the dearth of better
relationship is bidirectional since education and com- information: “There is, however, no other international
plex tasks are known to raise intelligence and knowl- aggregation of IQs.”
edge (Ceci, 1991; Schooler, Mulatu, & Oates, 1999). But “intelligence tests” are not the only cognitive
Intelligence and knowledge enhance individual and ability tests. International student assessments (PISA,
cultural rationality. They support rational decisions TIMSS, PIRLS, IEA-Reading) use carefully standardized
not only by private individuals, but also in institutions methods of data collection, but evidence other problems:
and the political system. They help to assess opportu- (1) data exist mainly for developed countries; (2) they are
nities and risks (insight, precaution), to use effective chiefly representative for school-aged children and
means, to achieve institutional goals, to avoid accidents, adolescents; (3) participation rates differ across countries;
to assess the importance of resources and anticipated (4) and school dropouts are not represented (only the part
outcomes (future outlook), and to maintain a climate of of youth that attends school). (5) There are inconsisten-
reason in which disputes are settled by verbal arguments cies in the age levels; the TIMSS and PIRLS assessments
rather than by the use of violence or coercion (e.g. in particular used class-level samples with different ages
Gottfredson, 2003; Habermas, 1976; Piaget, 1932; across countries. However, despite the many short-
UNESCO, 2004). At the level of institutions and of comings of IQ tests and school assessments, the Lynn
nations, aggregated individual intelligence effects and and Vanhanen IQs correlate so highly with the results of
genuine macro-social intelligence effects like efficient international school assessments that the two types of
economic and administrative structures (“intelligent tests appear to measure the same or at least a similar
culture”) come together. construct (Rindermann, in press).

2. Research at macro-social data level 3. Results of intelligence tests and student


assessment tests as indicators of one common
Research about intelligence at the national level is cognitive ability
confronted with problems of data quality: At a more
fundamental level, the comparability of cognitive test There is no theoretically important difference between
results across national and cultural boundaries has been intelligence tests and student assessment tests. Both
called into question (Greenfield, 1997), with national IQ- assess thinking and knowledge. Theoretically and
measures being especially controversial. Lynn and empirically they are similar (Coleman & Cureton,
Vanhanen (2002) collected intelligence test results from 1954; Cronbach, 1984; Ceci, 1991; Jensen, 1998). At
81 countries and transformed the results into one the national level the correlations between the two types
common norm (“Greenwich IQ”). For 104 additional of test are very high (r = .80–.90; Rindermann, in press).
countries intelligence was estimated by using data from At the individual level, the correlation of the SAT
neighboring countries with similar social, cultural and (Scholastic Aptitude Test or Scholastic Assessment Test)
racial characteristics. Their collection is a landmark, but with the ASVAB (Armed Services Vocational Aptitude
subjected to some problems (see Barnett & Williams, Battery) is r = .82, and with APM (Advanced Progressive
2004; Ervik, 2003; Hunt & Wittmann, in press; Richards, Matrices) it is r = .48 (r = .72 corrected for restricted
2002; Volken, 2003): (1) there are countries with very range; Frey & Detterman, 2004). The GCSE (General
small test samples; (2) in some cases, samples seem to be Certificate of Secondary Education, national examina-
unrepresentative; (3) different tests were used across tion in England for students at age 16) correlates about
H. Rindermann / Intelligence 36 (2008) 127–142 129

r = .69 (at latent level rl = .81) with the CAT (Cognitive situations – is based on the economic human capital
Abilities Test) and about r = .66 with the figural, school- theory. A similar position is held by the economic
distant scale of the CAT (Deary, Strand, Smith, & organization OECD and by many economic researchers
Fernandes, 2007). (e.g. Keating & Hertzman, 1999).
But there is a theoretical difference between thinking However, cross-sectional studies cannot present very
and knowledge, although these two intertwined ability strong evidence for causal interpretations of the
components are difficult to separate. Knowledge is cognitive-ability–GDP-relationship. Intelligence and
always required to solve the kinds of task that knowledge can influence GDP or vice versa or maybe
individuals are confronted with in everyday life or that there is a reciprocal causality. As Ervik (2003)
are used in cognitive ability tests. And thinking ability maintained: “Many alternative explanations to the
helps to increase and use knowledge. causal interpretation of the results come to mind: for
Since intelligence tests and school assessment tests example, richer countries spend much more on school-
are alternative measures of an homogeneous construct, ing and childcare, and schooling and IQ scores are
we can form a summary score from the two types of test positively correlated. Hence, rich countries have higher
(see Methods section). This will reduce the described IQ scores.” (p. 407) We need “proof regarding the
flaws of the two types of test studies and will provide a direction of causality” (Barnett & Williams, 2004, p.
concise measure of knowledge-reduced intelligence, of 395). Because of these ambiguities, Whetzel and
(as valuable and true estimated) knowledge and of McDaniel (2006) demand for the IQ–GDP-relationship
thinking skills that are needed to make use of this more “theory development and efforts at causal
knowledge. Being based in part on assessments of modeling” (p. 457). Hunt and Wittmann (in press)
school-aged children and adolescents, it will represent recommend longitudinal studies.
mainly the intellectual level of young people, although it Longitudinal analyses that can distinguish the
is likely to parallel quite closely the intelligence of influence of cognitive abilities or education on
adults in the country. national wealth from the influence of wealth on
Compared to purely figural tests such as the Raven education or cognitive abilities have not been done
Matrices, this summed score represents to larger extent so far. International data collections (Barro & Lee,
knowledge. But conventional intelligence tests use not 1993, 2000; Lee & Barro, 1997) allow such analyses.
only figural, but verbal and numerical tasks too, and Cross-lagged panel designs, which compare the
intelligence theory always subsumed under intelligence influence of competing factors in a defined historical
the ability to process knowledge through the use of period, are the best feasible method for analyzing such
reasoning skills and the understanding of complex relationships. In these analyses the standardized path
cognitive problems (Piaget, 1947; Cattell, 1987/1971; coefficients between different variables are to be
Carroll, 1993). interpreted, not the correlations (Rogosa, 1980). But
non-experimental studies and studies at the macro-
4. Cognitive abilities and wealth: the problem of social level can never demonstrate in a compelling and
causality unequivocal way causal effects of variables free from
any historical context or free from the influence of
Lynn and Vanhanen (2002) have demonstrated a other variables:
strong correlation of r = .62 between intelligence test
results and GDP in 1998 (N = 185). Hanushek and Kimko 1. Outcomes could be caused by unmeasured determi-
(2000), Jones and Schneider (2006), Ram (2007), Weede nants, which are correlated with intelligence, such as
and Kämpf (2002), Weede (2006) and Whetzel and economic freedom or political freedom. This could
McDaniel (2006) showed that correlations of cognitive lead both to over- and underestimation of the IQ
ability with national wealth and economic growth persist effect.
in regression models controlling for other plausible 2. Other determinants could be important too, for
macro-social factors and when using different variables example natural resources. However, the aim of
and measurement points. Positive correlations also exist this study is not to provide a comprehensive
for state comparisons within the USA (r = .81, Davenport explanation for national wealth and economic growth
& Remmers, 1950; r = .50 without Washington DC, (backward), but merely to study the relevance of
Kanazawa, 2006; r = .18–.28, McDaniel, 2006a,b). The education and intelligence for these outcomes
interpretation – cognitive ability increases economic (forward). Further the existence of other important
wealth by improving the quality of work in complex factors for wealth does not destroy the relevance of
130 H. Rindermann / Intelligence 36 (2008) 127–142

cognitive abilities to wealth. (For example: The estimates for 79 states, based on measured data from
power of the sun to warm still exists on earth when neighboring countries, were corrected down (if student
additional heat is produced by volcanoes.) assessment studies are missing too) by 5 points. This
3. Researched determinants could be influenced by was done because it is assumed that countries with
other determinants and the effects of intelligence and missing data tend to be less developed with respect to
education can be indirect. For example, education education and research, which in turn tends to be
increases intelligence, intelligence increases the associated with poorer cognitive development. For
quality of work and the efficiency of organizations Liechtenstein, which is missed completely in Lynn
and institutions, which in turn increase wealth. But and Vanhanen (but participated in PISA), the mean of
factors behind or between (mediators) do not detract Switzerland, Austria and Germany (IQ 100) was used.
from the importance of intelligence. They help to The correlations of uncorrected IQ with further
understand more deeply the causal relationships. cognitive ability measures are: with PISA 2000 sum
4. Intelligence could have different effects in various uncorrected r = .88 (N = 46), with PISA 2000 sum
nations or historical periods. For example, intelli- corrected r = .84 (N = 46), with TIMSS sum r = .89
gence could be less important for national wealth in (N = 63), with TIMSS sum corrected r = .88 (N = 63),
countries at earlier stages of cultural, social and with PIRLS r = .78 (N = 33), with PIRLS corrected
economic development. Thus the results would r = .81 (N = 33), with GDP 1998 r = .62 (N = 185).
adequately describe the relationships for countries Correlations of corrected IQ including Liechtenstein:
in modernity. with PISA 2000 sum uncorrected r = .88 (N = 47), with
PISA sum corrected r = .84 (N = 47), with TIMSS sum
The aim could only be to show the effect of cognitive r = .89 (N = 63), with TIMSS sum corrected r = .88
abilities controlling for important variables in a defined (N = 63), with PIRLS r = .78 (N = 33), with PIRLS
historical period. corrected r = .81 (N = 33), with GDP r = .63 (N = 185).
PISA-2000 (Programme for International Student
5. Aims of this study Assessment, OECD, 2003): The sum was formed from
the scores for reading, mathematics and science
The first aim of the study is to describe the literacy (41 states; α = .98). For PISA and other school
distribution of the new summary score of intellectual achievement studies (TIMSS, PIRLS) the mean was
ability (formed from IQ and school achievement scores) set at 500 and the standard deviation at 100. Only 15-
across nations and its empirical validity (correlations year old students took part in PISA. Invariably, the
with measures of education, economic success and other intellectual proficiency of all young people is over-
characteristics of societies). estimated for those countries in which the school
The second aim is to investigate the influence of enrolment ratio of 15-year olds is low, for example
education and cognitive abilities on GDP and vice versa Albania (43%), Mexico (52%), Brazil (53%) and Peru
at the end of the 20th century with a cross-lagged (66%). This is because schooling is one of the most
design, controlling for the usually most important important determinants of cognitive development
variable for economic growth: economic freedom. (Lurija, 1976/1974; Ceci, 1991), and those no longer
in schools at age 15 are expected to have lower
6. Method intellectual proficiency than those still in schools.
Therefore the sum score was reduced according to the
To reduce problems of poor data quality and to following formula: PISA2000c = PISA2000 − ((100
ensure that countries at all levels of cultural, social and − participation rate from 0 to 100) × 2). The correction
economic development are represented in the sample, an means: Countries with 90% attendance rate get 20 points
average score was formed from different measures of subtracted, with 80% attendance rate 40 points sub-
one construct available for each country. tracted. Other corrections are conceivable. The used
correction formula assumes a normal distribution from
6.1. Cognitive abilities and corrections which an end piece of the lower part has been deleted:
For example, when the lowest 16% of a normally
The IQ-database of 113 countries stems from Lynn distributed sample with a mean IQ of 100 are missing,
and Vanhanen (2006). These IQs are standardized on a the mean resulting IQ will be 104–105 (PISA: 530). The
common norm scale with the mean of Great Britain set used formula subtracts for IQ 4.8 IQ-points or for PISA
at 100 and the British standard deviation set at 15. Their 32 points from the measured average and leads to
H. Rindermann / Intelligence 36 (2008) 127–142 131

marginally stronger corrections. The corrections are TIMSS 2003 (8th grade N = 44, 4th grade N = 24;
stronger for extremely low school enrolment ratios, e.g. Martin, Mullis, Gonzalez, & Chrostowski, 2004;
for 50% missing the formula would subtract 15 IQ-points Mullis, Martin, Gonzalez, & Chrostowski, 2004). The
or 100 PISA-points, although in a normally distributed correction formulas for older or younger than mean
sample the resulting mean would be only about 13 IQ- student age are for the 8th grade: TI803k = TI803 −
points or 87 PISA-points higher. The assumption is that ((AgeTi038 − 14.459) * 42); for the 4th grade: TI403 −
with low and extremely low school enrolment ratios ((AgeTi034 − 10.368) * 42). No information is presented
negative influences of other IQ-lowering factors, such as in the reports about participation rates.
poor nutrition and health care, low appreciation of IEA-Reading-Study 1991 (N = 24 countries for 9-year
education, of reading books, of argumentation and olds and N = 31 countries for 14-year olds; Elley, 1992).
thinking in everyday life, and intellectual simplicity of The mean age was 9.77 for 9-year olds and 14.73 years
home environments and society, will increase. For a for 14-year olds. The correction formula for older or
complete list of correlations between variables see younger than mean student age and for low par-
Rindermann (in press). ticipation rates of students are for the 9-year old student
PISA-2003 (OECD, 2004a, 2004b): The summary study are: Read09k = Read09 − ((Age9 − 9.7692) * 42) −
score was formed for reading, mathematics, science and ((100 − PR9E) * 2); for the 14-year old student study:
problem solving (40 states; α = .99). This score was Read14k = Read14 − ((Age14 − 14.7333) * 42) − ((100 −
corrected with the same formula as for PISA-2000 PR14E) * 2).
(PISA03K = PISA03 − ((100 − PartRP03) * 2)). PIRLS 2001 (Progress in International Reading
TIMSS 1994–1995 (Third International Mathematics Literacy Study, N = 33 countries; Mullis, Martin,
and Science Study, Beaton et al., 1996a; Beaton et al., Gonzalez, & Kennedy, 2003): Reading competences
1996b; Martin et al., 1997; Mullis et al., 1997), 8th of fourth graders. Correction for older or younger than
grade (N = 39) and 4th grade (N = 25). An averaged mean student age (formula: PIRLSK = PIRLS − ((Age
score of mathematics and science literacy was formed − 10.312) * 42)). The correction formula means: For
(α = .94 and α = .93), and this was corrected for mean countries with students 1 year older than the mean
student age (formula for 8th grade: TI895k = TI895 − (10.312 years) 42 points were deducted and for
((AgeTi958 − 14.308) * 42); 4th grade TI495k = TI495 − countries with students 1 year younger than the mean
((AgeTi954 − 10.232) * 42)). The correction means: were added 42 points. No information is presented in the
Countries with students 1 year older than the mean reports about participation rates.
(14.308 or 10.232 years) get 42 points subtracted, and Averaged score of all corrected measures of cognitive
countries with students 1 year younger than the mean abilities: Aggregation of different ability scales within
get 42 points added. One year of school is expected to studies was done by taking the arithmetic mean. The
represent a gain of ca. 42 points (mean of reports by original scale was conserved. Between different studies,
Mullis et al., 1997, p. 31 and p. 43, Martin et al., 1997, different grades/ages of the same study in the same year
p. 29 and p. 41, Beaton et al., 1996a, p. 29, Beaton et al., (e.g., in IEA-Reading 1991, and TIMSS 1995), different
1996b, p. 29). For the 8th grade, information also exists years of the same study (PISA 2000 and 2003; TIMSS
about participation rates (“coverage of 13-year old 1995, 1999 and 2003), and different studies (IEA-
students”; Beaton et al., 1996a, p. A12) and the Reading, TIMSS, PISA, PIRLS and IQ-collection),
correction formula was: TI958cc = TI958c − (100 − aggregation was only possible after development of a
ParRT958) * 2. For Kuwait and Israel, no information standardization formula with those countries that
about attendance rates was provided, so the value of the participated in at least two studies. This was required
next Muslim neighbor Iran (72%) was used for Kuwait, because different scales had different means and
and the worldwide mean (87.57%) was used for Israel. standard deviations (e.g., 500 and 100 vs. 100 and
TIMSS 1999 (8th grade N = 37; Martin et al., 2000; 15), and different assessments had different standardiza-
Mullis et al., 2000): The correction for older or younger tion samples (but the same scales, e.g., IEA-Reading,
than mean aged students was: TI899k = TI899 − TIMSS and PISA, or TIMSS 1995 grade 4 vs. 8; PISA
(AgeTi998 − 14.366) * 42. The correction means: For 2000 vs. 2003). Before aggregation, the means and
countries with students 1 year older than the mean standard deviations for those countries that took part in
(14.366 years) 42 points were deducted, and for two (or more) studies were calculated. The aggregation
countries with students 1 year younger than the mean was done stepwise: First, the different scales of one
42 points were added. No information is presented in the study were averaged (e.g., for TIMSS 1999: mathe-
reports about participation rates. matics and science); then different age or grade levels of
132 H. Rindermann / Intelligence 36 (2008) 127–142

one study in 1 year (e.g. IEA-Reading 1991 9- and discipline (low skipping rate, punctuality, low rate of
14 years old, TIMSS 1995 4th and 8th grade); then interruptions or behavioral problems during teaching),
different survey years of one study type (PISA 2000 and supplementary lessons during afternoon, evening, week-
2003, or TIMSS 1995, 1999 and 2003); and finally end or holidays, small classes and low student–teacher-
different studies of one student assessment approach ratios, and reaching of high grades at a young age (e.g.,
(age, PISA-studies, vs. class, TIMSS-studies and in the age of 10 pupils at grade 5 and not in the age of 11
PIRLS, vs. mixed and old study, IEA-Reading). At the at grade 4). Data are collected from the OECD- and
end, one total score was calculated for all cognitive IEA-studies and from Barro and Lee (1993), α = .59,
ability studies. Student assessment studies were given N = 158.
twice the weight of the Lynn and Vanhanen (2006) IQ Gross domestic product (purchasing power parity)
collection because they are more recent, have larger per capita 1998 from Lynn and Vanhanen (2002),
samples, and consist of more studies. A similar total N = 185. Their sources are UN data sets.
score was calculated for student assessment studies only Rule of law 1970–2000 with emphasis on ownership
(PISA, TIMSS, PIRLS, IEA-Reading). law from Gwartney and Lawson (2003) and Knack and
Correlations of both sum scores, first total sum value, Keefer (1995), α = .90, N = 131.
second student assessment sum value, with single study Speed of life 1992–1995 from Levine (1997),
measures are: total sum value with IQ-L&V corrected containing service speed at post office (how much
r = .99 (N = 193) and student assessment value with IQ- time is needed to sell a stamp), walking speed and
L&V corrected r = .86 (N = 77), with PISA sum accuracy of clocks (α = .72, N = 31).
corrected r = .97 (N = 48) and r = .99 (N = 48), TIMSS Number of books (parents and children) from PIRLS
sum corrected r = .97 (N = 63) and r = .98 (N = 63), IEA- 2001 and TIMSS 1995, 1999 and 2003 (α = .94, N = 63).
Reading corrected r = .95 (N = 31) and r = .96 (N = 31), Democracy 1950–2004 from Vanhanen (2005) and
PIRLS corrected r = .95 (N = 33) and r = .97 (N = 33). Marshall and Jaggers (2000), α = .95, N = 183.
Both sum scores (all cognitive ability studies and Interpersonal trust in 1990s from Inglehart (1997),
student assessment studies only) correlate with r = .98 N = 41.
(N = 78). Economic growth between 1950 and 1990 from Lynn
The results of the different cognitive ability studies and Vanhanen (2002), N = 185. Their source is Maddi-
are highly correlated. Outcomes of factor analyses son (1995).
support an unidimensional factor structure (93–95% of Homicide rate (per 100 000 inhabitants) 1995 and
the variance was explained by the first unrotated factor; 2002 (α = .41, N = 138) and rate of solved cases for
Rindermann, 2006, in press). homicide 1995 and 2002 (α = .77, N = 122) from Interpol
(2004).
6.2. Attributes of societies War 1960–1990, N = 118, from Sala-i-Martin (1997)
completed and corrected by the author for the years
Educational level of adults: The standardized values between 1960 and 2000, N = 186. The variable
of three measures were averaged (α = .94, N = 173 represents not only participation in war, but intensity
countries): 1. Adult literacy rate 1991 (N = 172), from of war and the destructive effect of war in their own
Vanhanen (1997). 2. Percentage of persons between 12 country including civil war (e.g. USA small value in
and 19 years old 1960–1985 (today adults) having spite of participation in many wars; Afghanistan, Haiti,
graduated from secondary school (N = 117), from Liberia and Somalia maximum value). Correlation
Mankiw, Romer, and Weil (1992). 3. The mean of between war from Sala-i-Martin and the new war
years of schooling of persons 25 years old or older for variable: r = .66.
1990, 1995 and 2000 (N = 107), from Barro and Lee HIV-infection rate 2001 and 2003 for adults from
(2000). UNAIDS/WHO (2003), α = .99, N = 165.
Quality and quantity of school education of students: Government spending ratio 1980–89 from Barro and
Standardized scores were averaged for the percentage of Lee (1993), N = 138. Percentage of government spend-
children attending pre-school or kindergarten, hours ing (e.g. for redistribution, for administration, for police,
taught per year in regular schools, young age of for military, for infrastructure) of gross domestic product.
streaming (as an indicator of emphasis on school per- Gini-coefficient (income inequality) from Fukuda-
formance, streaming in younger age leads to a higher Parr (2004) and Deininger and Squire (1996), 1951–
value), use of performance tests by schools for coun- 2002 period averaged (major period 1970s to 1990s),
seling parents or streaming decisions, central exams, α = .89, N = 148.
H. Rindermann / Intelligence 36 (2008) 127–142 133

Number of children per woman (total fertility rate, The time period match is not perfect, but it
TFR), 1960–84 average from Barro and Lee (1993), approximates a 30-year interval. The use of GDP from
N = 130. 1998 and 2000 leads to nearly identical results. The
Economic freedom 1960–2000 from Gwartney and 1998 data show one advantage: 1998 is nearly half-way
Lawson (2003), O'Driscoll, Holmes, and O'Grady between 1991 and 2003, the time range of the more
(2002) and Sala-i-Martin (1997), α = .89, N = 165. recent set of student assessment studies.
Level of low corruption 1980–2003 (corruption
inverted to low corruption) from Transparency Interna- 6.4. Cognitive ability data only from the youth of
tional (2004), α = .98, N = 132. nations — a problem?
Quality and speed of bureaucracy between 1972 and
1995 from Knack and Keefer (1995), N = 60, and The use of large-scale assessments from students
between 1984 and 2002 from Drori, Jang, and Meyer between 9 and 15 years of age to explain macro-social
(2006), N = 140, α = .90, N = 140. Both author groups development (e.g. growth) seems to be questionable.
use data from international organizations (Business Students do not work, vote or make political decisions.
Environmental Risk Intelligence, International Country However, intelligence is fairly stable during adult life,
Risk Group). and therefore adolescents represent a plausible proxy for
Geographic distance from equator from Sala-i- the intelligence level of the working population during
Martin (1997), N = 133. the following decades. In addition, the school achieve-
ment of children and adolescents closely parallels the
6.3. Data for cross-lagged study (repeated intellectual ability level of adults in the country. This is
measurements) shown in a correlation of r = .70 between the average
scores of student performance studies and the results of
Years at school was the “average schooling years the adult literacy study of the OECD (2000; N = 20,
in the total population over age 25” according to Barro r = .73 with the total score of all cognitive ability studies;
and Lee (2000). (For 1970 N = 101 countries, for 2000 Rindermann, in press). Therefore differences between
N = 104 countries.) nations in the adolescent population correlate with
GDP was from Barro and Lee (1993) for 1970 (122 differences between nations in the adult population.
countries), and from Lynn and Vanhanen (2002) for Differences in reproduction rates of the adults could
1998 (185 countries). cause problems in cross-sectional, but not in long-
Economic freedom ratings for 1970 and 2000 (122 itudinal studies.
countries each) were from the Fraser Institute (Gwartney
& Lawson, 2003). 6.5. Statistical methods
Measures from former studies on cognitive abilities
come from student assessment studies collected by Lee Pearson product moment correlations were used for
and Barro (1997). From 1964: IEA-Mathematics 13-year bivariate correlations, additionally GDP was partialed
old students, eighth grade; IEA-Mathematics at the end out. Longitudinal effects were calculated by the use of
of secondary school. From 1972: Science 10-year old cross-lagged path coefficients in a cross-lagged panel
students; science 14-year old students; science at the end design (see Shadish, Cook, & Campbell, 2002; for
of secondary school; reading 13-year old students. Mean causal interpretation: Pearl, 2000). This method pro-
correlation with weighted N and after Fisher's-Z- vides a test of reciprocal causal relations between two or
transformation is r = .62. The complete sample for old more variables. The standardized path coefficients (β)
student assessment studies includes 19 nations: Aus- between time-lagged variables are reported, along with
tralia, Belgium, Chile, Finland, France, Germany, Great correlations in parentheses. Additional correlations help
Britain, Hungary, India, Iran, Israel, Italy, Japan, Malawi, to estimate the influence of other variables in the model
Netherlands, New Zealand, Sweden, Thailand, USA. (by inspection of the difference between the correlation
The overall cognitive ability score including intelli- coefficient and the path coefficient), they allow a check
gence tests from Lynn and Vanhanen is not usable as a of the model (1 − error = R2 = Σrβ) and to calculate the
second measurement point of cognitive abilities because proportion of explained variance through each factor
in many countries part of the IQ values is of older origin. (R2 = Σrβ). According to Rogosa (1980), unlike the path
Therefore only data from student assessment studies coefficients the cross-lagged correlations are not useful
between 1991 and 2003 were used for the cross-lagged for estimating causal effects because of their stronger
analysis. dependence on the stability and variance of the
134 H. Rindermann / Intelligence 36 (2008) 127–142

variables. An even more important reason is that cross- of relationships across different country samples,
lagged path coefficients represent the incremental part different variables, different measurement points and
of the other variables in the model, the part that is not various studies of different authors.
explained by self-prediction. Even highly stable vari- For drawing the map the SAS program was used.
ables, such as GDP, can be explained by other variables
in a model. The cross-lagged path analyses were done 7. Results
with LISREL. Good values for fit indices are
SRMR ≤ .08 (Hu & Bentler, 1999) or SRMR ≤ .05 7.1. International distribution of intelligence and
(Schermelleh-Engel, Moosbrugger, & Müller, 2003) and knowledge
CFI ≥ .95 (Hu & Bentler, 1999) or CFI ≥ .97 (Scher-
melleh-Engel et al., 2003). Mean cognitive abilities differ greatly between
Cross-lagged panel designs can explain the changes countries (Fig. 1). The East Asia region has the highest
in a variable from a former to a subsequent measurement cognitive ability scores, including Taiwan (first),
point. They cannot explain the origin of differences at Singapore (second), China (third), South Korea (fourth),
the first measurement point. Generalization to other time Hong Kong (fifth) and Japan (sixth). Second are North-,
periods is possible only with additional assumptions, West- and Central-Europe and the countries which have
justification and empirical evidence (e.g. “because of the been settled by these Europeans: Finland (seventh),
relevance of invention, organization and planning, Netherlands (ninth), Canada (tenth), Great Britain
intelligence and knowledge in developed societies (eleventh), Iceland (twelfth), Switzerland (13th), Austria
have been important for growth from 1950 to 1970 as (15th), New Zealand (16th), Sweden (17th), Australia
well”). For longitudinal cross-lagged panel designs GDP (18th), Belgium (20th), Norway (21st), USA (23rd),
is a more appropriate variable than economic growth France (24th), Germany (25th) and Denmark (27th).
(the difference between two measurement points itself Medium results are achieved for South and East Europe
represents growth, the change in wealth). (here the highest results are for: Italy with 14th and
Like all non-experimental designs, cross-lagged Czech Republic with 19th rank) and low results for
panel designs are useful for causal interpretations only Latin America (here the highest rank is for Uruguay
if the “right” variables are included. The non-inclusion with 55th).
of causal variables that are correlated with the variables Scores are low in the Muslim Middle East and even
in the analysis can bias the results. A less relevant lower in sub-Saharan Africa. With one exception, all of
problem is the absence of background variables like the 34 lowest-scoring countries are in sub-Saharan
culture, because they probably stand behind the Africa. The exception is Haiti (185th, data were
researched variables and mainly work through them estimated by Lynn and Vanhanen by using test results
(e.g. culture influences education, cognitive abilities and from Jamaica, estimated intelligence test data were
economic freedom and through these factors culture has corrected down by 5 points), a country with a population
influence on national wealth). To reduce problems of and culture similar to sub-Saharan Africa. Even some
causal interpretation, the conventionally most important countries with good economic development and rela-
variable for economic growth, economic freedom, was tively stable democracy and rule of law, for example
included, different samples were used (for educational Botswana (138th) and South Africa (155th), score low
variables there exists a larger sample) and in further on measures of cognitive ability. Intervention studies
studies political aspects were considered (Rindermann, using formal education or training have demonstrated an
submitted for publication). Additional variables, such as unused potential for cognitive improvement in these
mineral resources, are important for national wealth countries (Skuy et al., 2002). Extremely rich Arab
(Lynn & Vanhanen, 2002, 2006; Whetzel & McDaniel, countries such as Kuwait (100th) score no better than
2006), but they do not change the influence of poor Arab countries (Lebanon, 93rd; Iran, 81st).
education, cognitive abilities and economic freedom. Regions with low cognitive abilities, including sub-
Significance tests were not used for interpretation Saharan Africa and the Muslim Middle East, seem to be
(for an in-depth justification e.g. Cohen, 1994; Falk & prone to cultural and social crisis (see UNDP, 2003;
Greenbaum, 1995; Gigerenzer, 2004; Hunter, 1997). UNESCO, 2004). Low political power and political
Especially at the macro-social level they are not instability are associated with low cognitive ability.
appropriate for scientific reasoning. More instructive These observations suggest important causal rela-
for inductive generalization – which is not possible with tionships of cognitive abilities with political, cultural
significance tests – is the demonstration of the stability and economic conditions. But are the cognitive ability
H. Rindermann / Intelligence 36 (2008) 127–142 135

Fig. 1. World map of cognitive ability sum score (N = 194, darker means higher ability, no data for West Sahara and Greenland).

test measurements and the national differences valid? negative correlation with homicide corresponds to
And if they are valid, what are the causes of national similar results at the individual and US-state level
differences in cognitive abilities? (Lynn & Vanhanen, 2002; McDaniel, 2006b), the
negative correlation with HIV is mirrored by a positive
7.2. Correlations with important macro-social correlation with health at US-state level (McDaniel,
variables 2006b).
Even after partialing out GDP, educational variables
Correlations (Pearson's r) with country-level vari- (education of young adults, education of the youth and
ables, mainly from the 1990s, show close relations number of books) remain highly correlated with
between cognitive abilities and educational attributes cognitive abilities. Political, economic and social
(Fig. 2). In countries with young adults of a high attributes of societies show less stable correlations.
educational level, there are good quality and quantity of The positive correlation between adult education and
school education and plenty of books at home, with the cognitive ability remains stable in different international
result that intelligence test and school performance test sub-groups: in developed r = .56 (N = 82) or less
scores are higher. developed countries r = .55 (N = 91); in sub-Saharan
But there are also high correlations with social, Africa r = .48 (N = 46) or in Europe r = .45 (N = 37); in
political and economic variables including quality and traditionally Catholic countries r = .62 (N = 36), Protes-
speed of bureaucracy, rule of law, gross domestic product tant countries r = .21 (N = 13), Orthodox countries
(GDP), low corruption, democracy, economic freedom r = .95 (N = 13), countries of eastern religions (Con-
and economic growth. The correlation between cogni- fucian, Buddhist, Shinto) r = .73 (N = 15) and Muslim
tive ability level and GDP (r = .63, N = 185) even countries r = .71 (N = 32). After controlling for distance
increases when the logarithm of GDP is used (r = .70, from the equator, the partial correlation between adult
N = 185), but remains below the correlations with education and cognitive ability is rp = .63 (N = 133).
education (educational level of adults r = .78, N = 173, The ability to think and to use knowledge seems to be
quality and quantity of school education r = .74, attributable to education (see Barber, 2005). Differences
N = 158). An increase of 10 IQ points corresponds to a in cognitive abilities at international level reflect
doubling of the GDP (Dickerson, 2006). Even inter- differences in education. This has been shown in
personal trust and the rate of solved homicide cases are many studies at the individual level (Lurija, 1976/
associated positively with intelligence and knowledge. 1974; Ceci, 1991; Stelzl, Merz, Remer, & Ehlers, 1995;
Negatively correlated are homicide rates, war (destruc- Winship & Korenman, 1997). The same is demonstrated
tion by war; see also DeGroot, 1951), HIV-infection here at the country level, with high and stable
rates, high government spending ratio, income inequal- correlations between cognitive measures and school
ity and the child rate per woman (total fertility rate). The education.
136 H. Rindermann / Intelligence 36 (2008) 127–142

Fig. 2. Correlations between cognitive ability and society attributes.

The correlational pattern shows that intelligence and academic degrees (e.g. “secondary school complete”)
knowledge are indicators, causes and/or consequences are less important than the quality of the product that
of a successful civil society (see Rindermann, submitted leaves the schools. But cross-sectional studies do not
for publication). One causal hypothesis will be tested reveal the direction of the causal arrow between
here: the economic wealth thesis. cognitive ability and GDP. Intelligence and knowledge
can influence GDP (human capital theory) or vice versa
7.3. Cross-lagged relationships between education and (e.g. by better nutrition and health care) or maybe there
GDP and between cognitive ability and GDP is a reciprocal causation. This question can best be
approached through the use of longitudinal cross-lagged
Lynn and Vanhanen (2002) have demonstrated a analysis.
correlation of r = .62 between IQ and GDP98 at the For the path analysis in Fig. 4 (years of schooling) the
country level (N = 185). After downward correction of fit indices are good: SRMR = .02 and CFI = .97. Educa-
their estimates for countries with missing data this tion has a stronger impact than economic freedom
correlation is r = .63. The correlation of PISA 2000 with (including aspects of rule of law) on GDP (βSY1 → GDP2 =
GDP98 is even higher despite substantial range .40, r = .84, vs. βEF1 → GDP2 = .23, r = .68; see also Table
restriction (r = .69, N = 40; r = .72 with correction for 1). The longer and the more the children of 1970
participation rate). Other authors have confirmed the attended school, the better was the economic develop-
results. In direct comparisons, GDP is more strongly ment between 1970 and the end of the century.
associated with cognitive ability measures (r = .65, This analysis included two ex-communist countries,
N = 185) than with educational variables (r = .60, Hungary and Poland. When these two countries are
N = 173). The difference is even more marked for the excluded, the results for the remaining 86 countries
regression coefficients in a 2-predictor model remain the same: The impact of years in school (SY) on
(βCA → GDP = .48, r = .65, βEdu → GDP = .22, r = .60, GDP (βSY1 → GDP2 = .43, r = .86) is stronger than the
N = 173). Educational information is less reliable and effect of economic freedom on GDP (βEF1 → GDP2 = .22,
valid than are ability measures. And years in school and r = .69), and even stronger than the effect of old GDP on
H. Rindermann / Intelligence 36 (2008) 127–142 137

Table 1 Here we are limited to a sample of only 17 nations


Coefficients for cross-lagged analyses that includes Australia, Belgium, Chile, Finland, France,
Relationship r (p) β (p) CI of β Germany, Great Britain, Hungary, Iran, Israel, Italy,
Fig. 4, education, economic freedom and gross domestic product, Japan, Netherlands, New Zealand, Sweden, Thailand,
N = 88, 1970–1998/2000 and the USA. But the results are virtually the same (Fig.
SY1 → SY2 .93 (.000) .93 (.000) .77–1.07 5). For the path analysis in Fig. 5 the fit indices are very
SY1 → EF2 .71 (.000) .54 (.000) .27–.76
good: SRMR = .02 and CFI = 1.00. Again, economic
SY1 → GDP2 .84 (.000) .40 (.000) .27–.63
EF1 → SY2 .51 (.000) .09 (.084) −.01–.19 growth is more strongly related to school-related
EF1 → EF2 .76 (.000) .31 (.001) .13–.48 cognitive abilities (βCA1 → GDP2 = .29) than to economic
EF1 → GDP2 .68 (.000) .23 (.000) .14–.39 freedom (βEF1 → GDP2 = .10).
GDP1 → SY2 .78 (.000) −.06 (.468) −.22–.10 When ex-communist Hungary is excluded from the
GDP1 → EF2 .67 (.000) .02 (.891) −.25–.29
sample, the results remain similar. The impact of
GDP1 → GDP2 .88 (.000) .40 (.000) .23–.63
cognitive abilities on GDP (βCA1 → GDP2 = .34, r = .73)
Fig. 5, cognitive ability, economic freedom and gross domestic is still stronger than the impact of economic freedom
product, N = 17, 1964/72–1991/2003 (βEF1 → GDP2 = .08, r = .51).
CA1 → CA2 .85 (.000) .74 (.000) .37–.84 The results remain similar when the logarithm of
CA1 → EF2 .55 (.024) .25 (.268) .02–.79
GDP is used for the 17-nations sample, with a stronger
CA1 → GDP2 .63 (.007) .29 (.024) .05–.54
EF1 → CA2 .38 (.129) .17 (.263) −.08–.31 impact of cognitive abilities (βCA1 → GDP2 = .38, r = .72)
EF1 → EF2 .25 (.332) −.20 (.437) −.54–.27 than economic freedom (βEF1 → GDP2 = .03, r = .45), and
EF1 → GDP2 .57 (.017) .10 (.435) −.18–.34 a stronger impact of cognitive abilities on gross do-
GDP1 → CA2 .66 (.004) .21 (.237) −.08–.28 mestic product than gross domestic product on cognitive
GDP1 → EF2 .68 (.003) .68 (.028) .07–.91
abilities (βGDP1 → CA2 = .20, r = .67). Thus education and
GDP1 → GDP2 .90 (.000) .70 (.000) .42–.96
cognitive abilities are more important than economic
Note: standardized path coefficients (β), exact significance levels up to
freedom as determinants of economic growth.
three decimal places, CI: confidence interval (95%) for standardized
path coefficients; SY: years of school education, EF: economic Differences between nations in education and
freedom, GDP: gross domestic product, CA: cognitive ability. cognitive abilities explain better later differences in
wealth than differences in economic freedom do.
But national wealth influences the development of
new GDP (βGDP1 → GDP2 = .37, r = .88). Reverse effects cognitive abilities too (βGDP1 → CA2 = .21; see Fig. 5).
on education (years at school) are small: βEF1 → SY2 = .09 Good nutrition and health care are considered important
(r = .55), βGDP1 → SY2 = −.08 (r = .79) and βSY1 → SY2 = for the development of cognitive abilities, especially
.95 (r = .93). among the poor sections of society (Lynn, 1990;
By using the logarithm of GDP the results remain Glewwe & King, 2001; Whaley et al., 2003), probably
similar for the entire 88-nations sample, with a stronger also the access to mass media like newspaper, TV and
impact of education (βSY1 → GDP2 = .27, r = .84) than Internet (Barber, 2006). These factors are likely to be
economic freedom (βEF1 → GDP2 = .10, r = .60) on GDP. important for cognitive differences among countries as
Effects on education are small: βEF1 → SY2 = .03 (r = .51) well.
and βGDP1 → SY2 = .18 (r = .85). The correlations between macro-social variables
Formal education can create economic wealth only increase from 1970 to 2000. They may reflect the
by increasing human capital. It does so not by conferring growing interdependence of the success of nations in
educational degrees, but by changing the attitudes and modern age.
raising the cognitive ability of students. In the presented
analyses, education is treated as a proxy for cognitive 8. Discussion
ability, the capacity to understand and solve problems by
thinking and using of knowledge. But the effects of The high correlations with a host of macro-social
education can go beyond knowledge and reasoning variables (Figs. 2 and 3) demonstrate the validity of
skills (including attitude change such as conscientious- intelligence as a link in the causal nexus of cultural,
ness and cooperativeness). In order to confirm that the political and economic “modernization”. Measures of
effects of schooling are mediated through increased formal schooling, in particular, are closely related to
cognitive skills, we have to repeat the analysis with measures of cognitive ability. International differences
cognitive ability measures substituting for the measure in cognitive abilities correlate with differences in
of schooling. educational levels. These correlations especially support
138 H. Rindermann / Intelligence 36 (2008) 127–142

Fig. 3. Partial correlations between cognitive ability and society attributes (GDP partialed out).

the validity of international intelligence comparisons. that the unusual developments of the past one or two
Education itself probably depends mainly on cultural centuries are based on positive feedback loops in which
factors, less on economic. The education–intelligence increased and better school education, technological
relationship is presumably reciprocal: schooling raises advances and rising prosperity raised intelligence, and
intelligence, and intelligent people realize the advan- rising intelligence entailed further advances in technol-
tages to be gained through a better education. This does ogy, prosperity and the school system (Meisenberg,
not negate the importance of other factors for cognitive Lawless, Lambert, & Newton, 2005; Meisenberg, in
development. Prosperity (Fig. 5) and genes (Rushton & press).
Jensen, 2005) are all likely to contribute also to The results reported here show that during the last
intelligence differences between nations and groups. third of the 20th century, education and cognitive
The economic, social and cultural complexity of abilities were more important for economic wealth
modern societies would be impossible without a high than economic wealth was for education and cognitive
level of cognitive abilities. Conversely, high intelli- abilities. This result is stable across the different
gence would not develop without this complexity. The national samples of education and ability and remains
20th century has seen near-exponential advances in after adding additional factors like economic freedom.
science and technology, massive increases in the Intelligence is even more important for wealth than
complexity of commercial enterprises and government economic freedom (see also Weede, 2006)! Whereas
bureaucracies and, perhaps most important, a vast the importance of intelligence for many personal life
expansion of the school system (Meyer, Ramirez, & outcomes has been recognized for some time (Gott-
Soysal, 1992; Schofer & Meyer, 2005). This has been fredson, 2003; Herrnstein & Murray, 1994), we should
accompanied by large IQ gains, which have been in realize that intelligence is also an important determi-
excess of 3 points per decade in many countries during nant for the economic and social development of
much of the 20th century (Flynn, 1987). Thus cognitive nations (for example the functioning of institutions in
development and cultural modernization are intimately the systems of law, economics and politics). The
associated (Oesterdiekhoff, 2000). It has been proposed present study shows that a high level of cognitive
H. Rindermann / Intelligence 36 (2008) 127–142 139

Fig. 4. Standardized path coefficients (and correlations in parentheses) between average schooling years in the total population over age 25, economic
freedom and gross domestic product (error terms as unexplained variance on the right), N = 88 nations, only measured data.

development can be an antecedent and likely cause for has to analyze the causal mechanism underlying the
economic growth, but other macro-social outcomes effects of ability on development of societies in a more
(e.g., democracy, rule of law, national power or health) detailed manner. For example, there is a positive
are likely to be influenced by education and intelli- relationship with low government spending ratio
gence as well (Rindermann, submitted for publication; (r = .47 and rp = .24). Abilities seem to enable a more
Rindermann & Meisenberg, submitted for publication). liberal economic constitution and thriftiness of state
Certainly the positive influence of young people's interventions. Conversely, a population with low
schooling and intelligence on the level of economic education and intelligence seems to necessitate more
freedom 30 years later (Figs. 4 and 5) deserves further state intervention, which tends to widen the influence
investigation. Future theoretical and empirical research of powerful special-interest groups.

Fig. 5. Standardized path coefficients (and correlations in parentheses) between cognitive abilities (students' assessment studies from 1964 to 1972
and 1991 to 2003), economic freedom and gross domestic product (error terms as unexplained variance on the right), N = 17, only measured data.
140 H. Rindermann / Intelligence 36 (2008) 127–142

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